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Informist, Monday, May 11, 2026

NEW DELHI – Prime Minister Narendra Modi Sunday urged people to cut down on the use of petrol and diesel as India finds itself in an increasingly tough spot amid the ongoing energy crises stemming from the war in West Asia. Speaking at a political rally, Modi said that petrol and diesel prices have risen sharply in the global market and cutting down on their use will help India conserve its forex reserves, which are being used to pay for imports. 

"Amid current crises, we have to stress on the need to save forex reserves," Modi said in a rally in Hyderabad. "Globally, petrol and diesel have become very expensive...it is our responsibility to save the forex reserves used to pay for the import of crude," he said. 

India is facing one of the worst energy crises in decades due to the war in West Asia. It has been exposed to energy supply and price shocks, given its dependence on countries in the Persian Gulf region for crude oil, liquefied petroleum gas, and liquefied natural gas supplies. Crude oil prices have soared around 60% following the closure of the Strait of Hormuz since early March. Nearly half of India's crude and natural gas imports pass through this crucial waterway. The supply shock has led to a surge in fuel prices in several developing and advanced economies, but retail prices in India have remained unchanged.

Since the war started on Feb. 28, the rupee has also seen significant volatility and has fallen 4.5% against the dollar, hitting a new lifetime low of 95.4025 Tuesday. Market participants expect the rupee to continue to fall as India is the third-largest oil importer in the world, with no end to the war in sight. India's oil imports were at $174 billion in 2025-26 (Apr-Mar), compared with $186 billion in FY25. India's foreign exchange reserves were at $690.69 billion as of May 1, almost $38 billion lower from the record high just before the war started. 

According to Modi, Indians must increasingly depend on metro rail, railways, and public transport to cut down on the use of petrol and diesel. Besides, India has already championed 'Work from home' during the COVID-19 pandemic, and it is time video-conferencing, online meetings, and other such technologies are popularised to cut down on travel, he said. The prime minister also said there was a rising trend among the middle class to take international trips and have destination weddings. These plans must be pushed back by at least a year, given the energy crises, he said.

The government has already taken a slew of measures to mitigate the impact of the war, including cutting excise duty on petrol to INR 3 per litre from INR 13 per litre and that on diesel to zero from INR 10 per litre to help oil marketing companies absorb the rise in crude oil prices. Reiterating the prime minister's words, Oil Minister Hardeep Singh Puri said Sunday that the above-mentioned measures "will help the nation conserve energy, save on the energy import bill and overcome the challenges arising out of the serious military conflict involving many energy-producing nations."

Puri said that state-owned oil companies are so far bearing the brunt of the impact, while ensuring uninterrupted energy imports and supply. "OMCs are buying crude, gas and LPG at higher cost, but in order to protect consumers, they are selling final products at lower cost, leading to massive mounting losses of up to 1,000 crore (INR 10 billion) per day," he said in a post on X. The central exchequer is also bearing INR 140 billion per month due to the excise duty cuts, he added.

"Even after this decision, estimated OMC (oil marketing companies') under-recoveries during this quarter itself are expected to surge to 2,00,000 crores (INR 2 trillion) and losses are expected to be around 1,00,000 crores (INR 1 trillion)," Puri said. Given the current backdrop, he called for "Jan Andolan to save and conserve energy."   End

US$1 = INR 94.48

Reported by Priyasmita Dutta

Edited by Akul Nishant Akhoury

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